Thursday, 31 July 2014

Healthcare
UK was set up in order to sell NHS expertise abroad, but following a series of
Freedom of Information requests, Social Investigations can reveal that far from
benefitting the NHS, 80 per cent of all contracts gained through Healthcare UK
have ended up in private hands.

Memoranda of Understandings made between China and the UK show that in exchange
for financial support for UK companies from Chinese investment, the government
has promised to provide information on UK health ‘policy’ and offer China’s
main financial investment arm access to ‘confidential’ information.

The
vast majority of corporations involved in the international agreements are kept
hidden through commercial confidentiality but enough evidence has emerged to
show how Healthcare UK acts as a conduit for commercial companies in a bid to
expand the ‘domestic market’ here in the UK as well as increasing the market abroad.

This
is Healthcare UK, unlocking deals for UK companies, some of who are based in
tax havens and whose investors have donated to the Conservative party. All in
the name of the NHS.

“Good news for the NHS”

The
original idea of exporting UK health expertise began under the Labour government, and took place towards the
very end of their tenure. The intent behind this project according to then
Health Secretary Andy Burnham, was to tap into the “exceptional knowledge and
intelligence within the NHS” with “investment of taxpayers’ money and funds
raised going straight back into (the) NHS.” In addition the Labour government
wanted to generate ‘demand in international markets’
and broker ‘partnerships’ of an unspecified nature.

By the time Labour had lost the election, NHS Global as it was then known, had failed
to gain any contracts for the NHS or anyone else through
the programme. This lack of interest didn’t deter the coalition, who continued the
project with a similar message that selling the NHS abroad
was “good news for patients” and the NHS.

In
the coalition’s 2011 ‘Plan for Budget Growth’ the government provided a snippet
of detail beyond the sound bites that had hitherto emerged (though not much),
of what activity would take place abroad.

‘The Government’ it said, ‘will
establish a proactive, entrepreneurial NHS Global to make the most of the NHS
brand internationally and to offer support and advice to NHS trusts…act as a point of contact for
NHS organisations’ to create ‘international customers’ and ‘international opportunities.’
Furthermore, the new NHS Global would ‘represent the interests of the NHS and
allow the NHS to shape the final business model.’

The
programme was eventually named Healthcare UK, a joint initiative between the Department of
Health, the newly formed NHS England and UK Trade and Investment. Not long
after its launch, Health Minister Anne Milton said
“This is good
news for NHS patients, who will get better services at their local hospital as
a result of the work the NHS is doing abroad and the extra investment that will
generate”.

Yet despite these claims, a freedom of information request revealed that just 2
out of 21 contracts obtained through Healthcare UK have gone to ‘public’
organisations, with the vast bulk of 17 ending up in the hands of private
companies worth over £281 million.

The beneficiaries

Records
of individual contracts won through Healthcare UK, that resulted in an export
or non-export deal are termed “business wins”. Information provided to
Healthcare UK on these “business wins”, is considered by UK Trade and
Investment of which Healthcare UK is a part, to be ‘commercially confidential’
and therefore hidden from pubic view.

According
to a Department of Health spokesperson, there
is no “such public interest in favour of disclosure…Any unauthorised disclosure
of commercially confidential information would be detrimental to companies and
would give rise to an actionable breach of confidence…there is a strong public
interest in maintaining the confidence in order to secure successful outcomes
for British businesses and the attendant economic improvements for the
country.” In other words corporate success is more important than the public’s
right to know.

Concern
over what contracts are being gained and what commercial companies are benefitting
is heightened by the fact that Serco, who are under investigation by the
Serious Fraud Squad, sit on the Healthcare UK board.

This
block on information also prevents us knowing who the two ‘public’ organisations
are, listed as having won contracts worth £251,000. Are they NHS organisations
or not?

Rather
confusingly, a further information request directed at the Department for
Business Innovation and Skills (DBIS), said NHS organisations have achieved “£45
million of business wins” through support from Healthcare UK. However, as the
DBIS admitted, they do not keep records of revenue generated by NHS
institutions through Healthcare UK, or whether those institutions were already
exporting their expertise prior to the existence of Healthcare UK. It would
appear; the Department of Health, Healthcare UK and UK Trade and Investment
don’t know what one another are doing or saying.

One
NHS organisation that has expanded abroad is The Leeds Teaching Hospitals, who
signed a MOU with the King Hussein Cancer Centre of Jordan in 2013. Whether
this agreement is part of the NHS "business wins" is not certain because
Healthcare UK has blocked the information. In keeping with the general secrecy
surrounding these deals, the Leeds Teaching Hospitals also cited “commercial
interests” for refusing to answer what costs were involved in running the MOU
with Jordan and or any revenue that may have been gained. In echoes of the
response from the Department of Health, a spokesperson for the Teaching
Hospitals said withholding of this information was more in the “public
interest” than any “accountability, transparency, and financial probity”.

Those that we know

When
Earl Howe was questioned on Healthcare UK in the House of Lords, he said, the
new trade arm, which has an annual cost of £3 million to run, would not “just apply to a few elite
organisations.”

Despite
most companies preferring anonymity, a few companies have given permission for
their names to be public and it would appear the elite are well and
truly present.

One successful company in a Chinese deal, is accountancy giant KPMG, who have
signed up as a business consultant for a ‘high-end
private hospital project’ in Beijing. They will work alongside multinational
contractor Arup, who will design the building.

Another
beneficiary of Healthcare’s global expansion is Circle Partnership, whose background
and presence in the highest echelons of government, highlights exactly why those
gaining contracts must be made public.

Circle are part-funded by Odey Management Ltd, who are based in the low tax jurisdiction
of the Cayman Islands. One of the main shareholders is Robin Odey who has given
£251,000 to the Conservative party. Circle’s former employees Nick Seddon and
Christina Robinson work in the No10 Health policy unit and as a special adviser
to Jeremy Hunt respectively. It would appear that moving from a private health
company into the power base of government is a natural career path these days.

Further parliamentary connections to Circle include Conservative peer Baron Higgins of Worthing, who holds in excess of
£50,000 worth of shares in Lansdowne UK Equity Fund, another investor in
Circle. In case that isn’t concerning enough, Circle Holdings, the controlling
body of Circle, is based in the low tax jurisdiction of Jersey; quite how that
benefits the NHS and its patients is unclear.

Circle’s involvement?

Circle’s
involvement in China is connected to CITIC Trust Co, part of China’s main
investment group. In a government press release at the end of last year it
said, Healthcare UK has “signed a Memorandum of Understanding with the CITIC
Trust and Circle Partnership to unlock commercial deals for UK companies in
areas such as primary care services, to provide integrated care and education
and training.” In addition, according to their website, Circle will help develop ‘integrated healthcare services for elderly patients’ and act as an adviser on ‘clinical’
matters.

Yet,
despite the government trumpeting Circle Partnership’s involvement, Healthcare
UK apparently has no idea what Circle is actually doing in China.

In
response to a request on Circle’s involvement in Healthcare UK and what
information they may be privy to, the government said, “We are not aware of any contract between CITIC and Circle
to perform this function (of unlocking deals) and within the CITIC-HealthcareUK MOU no individual company
is identified to carry out this function.”

What is known, is that Conservative MP Ken Clarke, who
recently resigned from his post as the Minister without portfolio, met with Paolo
Pieri, CFO and Tom Muir, the Director of Communications of Circle Partnership in
June last year. According to the Cabinet Office, “They discussed the Healthcare
UK priority markets of China, the Middle East and Brazil, with a focus on
forthcoming events and trade missions…Circle outlined their overseas
interests”. It sounds highly improbable that they do not know Circle’s role is in
China.

Moreover,
if so many contracts are landing in the hands of private companies, how can Healthcare
UK claim to be for the benefit of the NHS? After all this was the justification
given for selling the ‘NHS brand’ abroad and based on Circle’s role of
unlocking ‘commercial deals for UK companies’, it would seem the NHS won’t get
a look in.

This is part two of a two part report on Healthcare UK. See part oneherefirst.

Expand the ‘domestic market’
The use of the ‘NHS brand’ to sell healthcare abroad
has greatly benefited commercial organisations, with over 80% of contracts
landing in private hands. This disproportion towards private healthcare
contracts is also taking place on a much larger scale in the NHS. Since the
Health and Social Care Act officially began in April 2012, research carried out
by the NHS Support Foundation revealed 70% of NHS contracts have ended up with private
firms amounting to billions of pounds worth of income.

What this amounts to is an aggressive expansion of the UK healthcare market,
which although not mentioned in government propaganda, is their intent.
Healthcare UK was also meant to benefit the NHS, but contained in the memorandum
signed between Healthcare UK and the Chinese Ministry of Health, it is clear
that the main areas of cooperation are designed towards channeling contract
opportunities towards private companies. See
Appendix 1

The financial awards from China are potentially immense with David Cameron claiming
the Chinese healthcare market will grow by $400 billion by 2017. China is
seeking to develop a “safe, effective, convenient and affordable” healthcare
system to both urban and rural areas by 2020; furthermore, Premier Li Keqiang
recently stated he wants to “open the door for private capital”. It is no wonder Cameron wants
the UK private sector to be a part of that process.

Access to Policy

A further MOU held between Healthcare UK and CITIC Trust, a Chinese investment
arm of the CITIC Group, reveals the extent of cooperation required for their
partnership to work. ‘Citic’ it reads, will provide ‘financial support for
selected UK healthcare companies wanting to ‘extend their business in China’.
In return, Healthcare UK will act as a ‘source of information’ on the ‘UK
healthcare industry’, receive access to health ‘policy’, ‘confidential’
information, as well as be invited to form partnerships with ‘UK healthcare organisations.’

When
asked about the nature of the ‘confidential’ and policy information provided to
CITIC, Ian Cranshaw the Chinese lead for Healthcare UK said, “The confidential information referred to would likely be commercial
in confidence type information”. However, he failed to address the policy information
that would be imparted. Will
CITIC be in advance notice of policy so that it can better select its
investments? Will CITIC receive policy before parliament or the people?

The
secretive nature of Healthcare UK beyond the marketing publications that adorn
its website, means such questions remain unanswered.

Selling debt

The
opportunities for private companies don’t end there. A further MOU made between
Healthcare UK and the health Bureau of the Eastern coastal province of Zhejiang
contains a much wider level of agreement.

These
include the design of ‘Health policy and regulation’, ‘Training Medical Staff’,
establishing primary care provision, and ‘Systems for national and private
insurance’. In addition Healthcare UK will find UK companies to aid China in ‘public
and private hospital finance, construction, operation and regulation (PFI)’.

The
policy of PFI in the UK has been catastrophic for the NHS with the treasury
predicting a total financial burden of £242 billion. PFI continues to plague
NHS Hospital Trusts to the point of near bankruptcy, which led to the first
takeover of the running of an NHS hospital in Cambridgeshire by Healthcare UK
beneficiaries Circle.

Elite
private companies largely run PFI, and it is the cruelest of irony that more
PFI opportunities should be made by using the ‘NHS brand’. Companies like
construction firm Interserve, who have Conservative Peer Lord Blackwell as a
director, have raked in millions of pounds through selling
some of their PFI interests. Serco and Carillion, who both have representatives
on the board of Healthcare UK, have also gained major revenue through PFI schemes,
and this particular avenue in China, will do nothing for the NHS.

In
order to gain “business wins” in the Zhejiang province, Healthcare UK provides
pilot programmes from which they aim to gain contracts for those involved. Yet
here again, Mr Cranshaw explained “the pilots involve private UK companies rather than NHS
institutions”, and as the pilot schemes are ongoing, what these pilot schemes
are and who is involved face commercial restrictions.

The government
has claimed the three agreements with China will provide £120 million to the UK
economy, though how they have reached that sum is currently unclear and a
request for a breakdown of these figures has been made. Of course any deals
that are confirmed will not necessarily have the names of the companies
attached and so we will be unclear whether those gaining contracts are based in
low tax jurisdictions; have donated to any political party or indeed held
meetings with government officials.

The
push to be involved in the global healthcare market is well under way. Private
companies dominate the list of firms put forward by Healthcare UK to
operate in China and the contracts won.

The NHS is staring into the barrel of the Health and Social Care Act
legislative gun, weighed down by debt and deliberate underfunding. The idea
that an overstretched NHS can compete financially or even manage to operate an
international trade arm is highly questionable. Healthcare UK appears as yet
another government vehicle designed for the market over that of the NHS that
has very little intention to benefit patients.

When the government announced the Chinese deal, the NHS was not mentioned in their press release and based
on the contracts won and the money gained so far, the NHS will be but a minor
beneficiary of the global expansion that markets in their name.

Appendix 1

The
five areas of cooperation listed in the agreement with Zhejiang MOU are: